The extra legislative session called by the governor came to a close this week with our mission accomplished. We passed the largest income tax reduction in state history and ensured Missouri’s agricultural producers will have continued access to critical incentives to grow the state’s farm economy.
Beginning in 2023, the top individual income tax rate paid by Missouri wage earners will fall to 4.95%, from its current level of 5.3%. The state’s Budget and Planning Division estimates the rate reduction will save taxpayers more than $300 million next year, but Senate Bill 3 also provides additional tax cuts in future years if revenues continue to grow. If all of the potential revenue triggers in the bill are enacted, Missouri’s top individual income tax rate would fall to 4.5%, resulting in nearly $1 billion more in taxpayers’ pockets. Assuming the bill is fully enacted, the Legislature will have cut the state income tax rate by 25% over the course of a decade.
The other measure passed during the extra session addresses the governor’s primary objection to a bill approved by the Legislature in May. That measure, House Bill 1720, renewed several tax credit programs for agricultural producers and enacted new incentives aimed at spurring agribusiness in Missouri. The governor vetoed that bill because the programs were only extended for two years. He said he wanted six-year sunsets and asked the Legislature to revisit the legislation.
House Bill 3 is nearly identical to the vetoed bill, but now producers will have more time to apply, arrange financing and reap the benefits of the incentives. The measure renews tax credits for new generation cooperatives and specialty crops producers administered by the Missouri Agricultural and Small Business Development Authority (MASBDA), as well as incentives for the timber products industry and meat processors. The bill also provides new tax credits for biodiesel and ethanol producers and support for urban farms. In addition, the legislation expands lending programs authorized by Missouri’s Family Farms Act, allowing operations producing up to $500,000 each year to qualify for affordable financing. Finally, the bill streamlines regulations on logging trucks, improves oversight of anhydrous ammonia distributors and clarifies provisions relating to land surveys and taxes on farm machinery. All told, the provisions included in HB 3 will return about $40 million back into Missouri’s agricultural economy.
It took us several weeks to get done everything the governor asked of us, but the end result is good news for all Missourians. Wage earners will see less money taken out of their paychecks, and farmers and others involved in agriculture will have the assurance that programs they rely on to thrive will continue well into the future.
It’s my honor to serve as your senator for the 16th District. If you have questions or need any assistance, please call my office at 573-751-5713 or log onto my webpage at https://www.senate.mo.gov/brown for more information.